IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v12y2024i6p91-d1406387.html
   My bibliography  Save this article

Determinants of Corporate Indebtedness in Portugal: An Analysis of Financial Behaviour Clusters

Author

Listed:
  • Fernando Tavares

    (REMIT—Research on Economics, Management and Information Technologies, Department of Economics and Management, Universidade Portucalense, 4200-027 Porto, Portugal
    Instituto Superior Miguel Torga, Largo da Cruz de Celas No. 1, 3000-132 Coimbra, Portugal)

  • Eulália Santos

    (Higher School of Education and Social Sciences, CI&DEI, Polytechnic of Leiria, Apartado 4045, 2411-901 Leiria, Portugal)

  • Margarida Freitas Oliveira

    (CEOS.PP—Polo Coimbra (ISCAC) & Business Research Unit (BRU-IUL-ISCTE), Polytechnic Institute of Coimbra, Coimbra Business School, Quinta Agrícola-Bencanta, 3045-231 Coimbra, Portugal)

  • Luís Almeida

    (Higher Institute of Accounting and Administration of Aveiro, Aveiro University, 3810-193 Aveiro, Portugal
    GOVCOPP Unit Research, Aveiro University, 3810-193 Aveiro, Portugal)

Abstract

Corporate indebtedness is a powerful tool in determining a company’s financial health with impacts on its image and reputation. The main objective of this research is to study the determining factors in corporate indebtedness in Portugal. It also has the secondary objectives of creating clusters of companies’ behaviour in relation to the use of credit and verifying their differences in relation to the characteristics of the companies. It uses a quantitative methodology based on a questionnaire survey of 1957 Portuguese companies. The results of the factor analysis show the formation of six determining factors in corporate indebtedness, namely the negotiating relationship with banks, financing, cycle and indebtedness, company operating performance, guarantees used to obtain bank financing and financing risk analysis as well as secondary forms of bank financing. The application of cluster analysis to the six factors formed led to the classification of companies into three clusters: the resilient financial cluster, the operational excellence cluster and the strategic financial cluster. There are several statistically significant differences in the corporate financing factors in relation to the clusters to which they belong. The evidence of the factors and clusters explaining company financing provides insights for improving credit access practices and for implementing public policies that facilitate access to credit and promote economic development.

Suggested Citation

  • Fernando Tavares & Eulália Santos & Margarida Freitas Oliveira & Luís Almeida, 2024. "Determinants of Corporate Indebtedness in Portugal: An Analysis of Financial Behaviour Clusters," Risks, MDPI, vol. 12(6), pages 1-20, May.
  • Handle: RePEc:gam:jrisks:v:12:y:2024:i:6:p:91-:d:1406387
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/12/6/91/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-9091/12/6/91/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mayordomo, Sergio & Moreno, Antonio & Ongena, Steven & Rodríguez-Moreno, María, 2021. "Bank capital requirements, loan guarantees and firm performance," Journal of Financial Intermediation, Elsevier, vol. 45(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles A.E. Goodhart & Dimitrios P. Tsomocos & Xuan Wang, 2023. "Support for small businesses amid COVID‐19," Economica, London School of Economics and Political Science, vol. 90(358), pages 612-652, April.
    2. Ambrocio, Gene & Hasan, Iftekhar & Jokivuolle, Esa & Ristolainen, Kim, 2020. "Are bank capital requirements optimally set? Evidence from researchers’ views," Journal of Financial Stability, Elsevier, vol. 50(C).
    3. Marco Celentani & Miguel García-Posada & Fernando Gómez Pomar, 2022. "Fresh start policies and small business activity: evidence from a natural experiment," Working Papers 2210, Banco de España.
    4. Zhang, Xuan & Zhang, Yongmin & Scheffel, Eric & Zhao, Yang, 2022. "A key driver for the mixed relationship between loan risk premiums and collateral: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 83(C).
    5. Marek, Philipp & Stein, Ingrid, 2022. "Basel III and SME bank finance in Germany," Discussion Papers 37/2022, Deutsche Bundesbank.
    6. Bunderson, Stuart & Thakor, Anjan V., 2022. "Higher purpose, banking and stability," Journal of Banking & Finance, Elsevier, vol. 140(C).
    7. Song, Fenghua & Thakor, Anjan, 2022. "Ethics, capital and talent competition in banking," Journal of Financial Intermediation, Elsevier, vol. 52(C).
    8. Ambrocio, Gene & Hasan, Iftekhar & Jokivuolle, Esa & Ristolainen, Kim, 2020. "Are bank capital requirements optimally set? Evidence from researchers’ views," Journal of Financial Stability, Elsevier, vol. 50(C).
    9. repec:zbw:bofrdp:2020_010 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:12:y:2024:i:6:p:91-:d:1406387. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.